What does the future hold for Intel (NASDAQ:INTC)? Oppenheimer’s analyst Rick Schafer weighs in on the tech giant, following a meeting with Intel’s director of investor relations Tushar Jain at the Oppenheimer’s 16th Annual Semiconductor Bus Tour.
Schafer stated, “Management has begun to pivot the company datacentric, with a focus on IoT, storage, autos and datacenter. Revenues from computing/datacentric split roughly 50/50 today. DCG makes up ~70% of datacentric. Management is confident in its DC roadmap and leadership position. Adjacent businesses led by 3D XPoint (Optane), faster than NAND, create incremental growth opportunities. SSD Optane is already in the market, while DIMM for DC is expected out in 2H. Management commented on the pushout of 10nm CPUs from 2H18 to 2019 driven by well-publicized sub-par yields. It chalks up the yield lag to the decision to increase transistor density by ~2.7x vs. the typical 2-2.5x cadence. We’re encouraged to see DCG/datacentric growth, but see FCF leverage/growth as limited and remain sidelined here.”
Net net, Schafer reiterates a Market Perform rating on Intel shares, without providing a price target.
Every day, Wall Street analysts reiterates some stocks. But do these analysts even know what they’re talking about?According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Rick Schafer has a yearly average return of 17.3% and a 73% success rate. Schafer has a -1.2% average return when recommending INTC, and is ranked #80 out of 4830 analysts.
While Schafer is not convinced just yet on Intel, a cautious optimism is circling, as TipRanks analytics demonstrate INTC as a Buy. Based on 32 analysts polled in the last 3 months, 20 rate a Buy on Intel stock while 10 issue a Hold, and 2 recommend a Sell. The 12-month average price target stands at $60, marking an 8% upside from where the stock is currently trading.
As of this writing, Intel shares are up nearly 1% to $55.55, flirting with their 52-week high prices.